【正文】 Guiso’s analysis reveals that in Italy small firms keep on average more than four bank relationships whereas large Italian firms diversify their credit needs over more than 10 credit institutions. As shown by Hommel and Schneider, the Mittelstand in Germany relies on a smaller number of bank ties but even the small German firms on average borrow from more than one lender. Very small German firms borrow on average from two banks whereas large Why is it then that SMEs keep fewer and shorter bank relationships than large firms? As credit availability improves when relationships bee longer,one would expect information opaque SMEs to stay with the same creditor(s). To begin with the number of relationships, as Dietsch notes, an obvious reason is that SMEs have to spread out fixed costs of lending over a smaller loan amount. Adding more creditors to the list of the firm’s financial intermediaries will trigger additional costs. Therefore, smaller firms may be less willing to borrow from several banks at the same time. However, the disadvantage of relying only on one bank is that this bank may turn into a monopolist over time. Dietsch explains that, although it is expensive for the smaller firms to provoke petitive behaviour of their lenders by maintaining multiple relationships, smaller firms may still break monopolies by switching banks when time passes. This may explain the relatively short duration of bankfirm relationships of smaller firms. One remark is called for. Hommel and Schneider point out that the number of initial credit offers a firm enquires about before finalising a loan contract may be more informative than the number of its relationships. This is especially the case if firms seek offers from banks they had no prior relationship with. Another important element is whether firms seek offers from banks that are not located in the area where the firms have their headquarters. Overall, the authors conclude that Mittelstand firms seem to be more flexible than monly assumed. Companies approaching several banks obtain an average of approximately three loan offers. What is more, a substantial amount of offers originates from banks that had no prior relationship with the firm and/or from banks situated outside the immediate geographical vicinity of the firm seeking finance. This is quite surprising because it is often argued that a local bank is best informed about firms in its region, essentially tying small firms to local banks. Having established that both relationship banking and multiple banking enhance credit availability for SMEs, Dietsch continues his analysis by investigating whether bank consolidation in France has altered those two important features of European banking. He emphasises that bank consolidation in France went hand in hand with a lower concentration level in the business loan market. The wave of mergers and acquisitions thus seems to have stimulated petition between credit shows that the number of bankfirm relationships significantly increased during the consolidation period. The relative change in the number of relationships is most important for small and mediumsized panies. An increase in the number of creditors tends to improve credit availability and, indeed, the share of SMEs in the French business loan market has significantly increased during the 1990s. The mirror image of this is a relative decline in lending to large firms, which lost 8 percent of their initial market share of 65 percent in 1993. 5. Concluding remarks Bank consolidation and Basel II have widely raised the fear that banks may reduce their participation in the SME loan market segment. So far, these expectations cannot be borne by empirical findings. On the contrary, there are indications that recent and future developments in the European banking industry will actually foster SME lending.That said, especially for firms with less than 50 employees (or an annual turnover less than EUR 2 million) finance constraints still seem to hamper their development. It is worthwhile noting that a lack of financing does not necessarily imply a lack of debt. Indeed, credit rationing in the strict sense is rarely observed in France, Italy, and Germany. However, this does not rule out that banks overcharge SME loans and, as a consequence, that financial market imperfections have a negative impact on the growth of SMEs and thus the economy at large. Public policy in support of SMEs needs to be designed in such a way that relief is offered where finance constraints are most binding. In this respect, equity financing deserves more attention. According to a recent OECD report (OECD 2002), small businesses experience considerable difficulty in obtaining risk capital. In Europe, small firms are relatively unimportant on the equity market in parison to the United States. Therefore, the promotion of secondary capital markets and venture capital funds need to rank high on the political agenda.